Cost to transfer pension

weezie7

I have a pension which I can transfer with no cost or penalties, from original provider.


I had to see an IFA, new to me, not known, but on unbiased.com. Met once, no charge, then two further meetings.


Decision to take a Royal London 'Pension Portfolio with Income Release', which suits my needs. I will be taking 25% TFLS and then a regular income.


However, IFA is charging 2.25% of transfer value of full fund, which amounts to over £4k. There are on going charges of 1% (which I understand as fund will be managed by him).


My question is - £4k seems a lot to me for this work, so far? Is this 'normal' amount?


Any comments please?

dunstonh

My question is - £4k seems a lot to me for this work, so far? Is this 'normal' amount?

Its at the higher end. Half that would have been closer to desirable.

atush

I agree, it is steep. AS is perhaps the 1%.

Did you negotiate the fee before hand? You can ask for a set charge, not a %?

weezie7

I thought I had tried to negotiate with him! So much for my skills at that!


I have relooked at notes I took and he did say that there would be a one off cost of 2.25%, which I assumed was the charge to the new provider. I did not realise it was to him! I also will be clear in future, to ask what amount that is.


I am a little wary of him, as he He will does make me feel like I am rushing him. His phone alarm goes off in meetings, he seems to be in a rush.....


I will be more cautious in future..... Lesson learnt!


The 1% is to him, as he will move funds as appropriate to ensure growth of the fund. He assure me this will be done regularly.


Any advice to watch for?

atush

He should not be moving the money without consulting you, and again the 1% is high. You will also pay a fee to the platform provider and the funds he chooses.

What funds did he choose? What cost?

weezie7

Thanks atush.


How do I know where to look for where the funds are? Sorry is that seems a silly question - I know they are with Royal London.


I have not had all the paperwork through yet though.


Ongoing costs are 1% or so I thought.....

dunstonh

1% is high if its over £100k but normal if under. (assuming adviser only)

Is the 1% inclusive of all charges or just the adviser charge? (if its all charges, then that is good)

How much if the fund value?

% needs to be shown in monetary terms as a high percentage is not a lot on a small value but is on a large value.

Scottish Life(Royal London) are not a platform but a provider. They dont have platform charges.

mania112

weezie7 wrote: »

The 1% is to him, as he will move funds as appropriate to ensure growth of the fund. He assure me this will be done regularly.

at least he admits he's not a good stock-picker.

in truth, i doubt there'll be much switching going on, it's reviews and contact you want to ensure he's giving you.

you sort of brushed aside the 1% as acceptable, but in 3 years time he'll have another £4k off you, so make sure youre happy with him and the service he's going to offer you for that money.

mania112

the funds are possibly going to be Governed Portfolio... if you see the word Governed we know what they are.

if you think ongoing costs are 1% total, that could be split between royal london (0.4% i think) and the adviser (0.6%)

weezie7

To all!


Yes, it is a Governed Portfolio with Income Release. Fund is £150k.


The 1% is combined charges I believe.


I haven't had all the paperwork through at the mo.


I know there is a 30 day clause, if I want to pull out, is it too late to try to negotiate the 2.25% down? I don't want to pull out, but am cross that I have not understood properly what I may/will be charged.

dunstonh

The 1% is combined charges I believe.

Thats good.

is it too late to try to negotiate the 2.25% down?

Ask and see what happens.

but am cross that I have not understood properly what I may/will be charged.

It is a regulatory requirement that the charge is displayed in monetary terms. So, the fee agreement you signed should have stated the amount. Check that.